As a business news expert, you know the importance of staying up-to-date with the latest trends and insights in the financial world. That’s why the Extreme Investor Network is here to provide you with exclusive content that you won’t find anywhere else. Let’s dive into a recent report that’s making waves in the NFL world.
In a recent article from CNBC, it was revealed that there is a $2 billion gulf growing in Los Angeles between the NFL’s Los Angeles Rams and the Los Angeles Chargers. The Rams, ranked No. 2 on CNBC’s Official 2024 NFL Team Valuations list, are valued at $8 billion, while the Chargers lag behind at $5.83 billion. While the Rams have the recent success of a Super Bowl win under their belt, the disparity in value goes beyond just performance on the field.
The key difference lies in stadium economics. Both teams play at SoFi Stadium, which was financed by Rams owner Stanley Kroenke for over $5 billion. Kroenke owns and operates the stadium, allowing the Rams to receive about 85% of the revenue from luxury suites, sponsorships, and non-NFL events. On the other hand, the Chargers, owned by the Spanos family, are merely tenants in the stadium, receiving only a small portion of the revenue.
This revenue discrepancy is significant because stadium revenue is not shared among NFL teams, unlike national media rights and sponsorship deals. It’s where franchises can pull away in terms of overall value. Last year, SoFi Stadium hosted numerous non-NFL events, from Taylor Swift concerts to performances by Beyoncé, Ed Sheeran, Metallica, and Pink. The Rams kept 100% of that revenue, including the $625 million from the stadium naming rights, which will last through the 2039 season.
While the risk of building their own stadium was substantial for the Rams, with over $3.5 billion in debt, it has paid off handsomely. Since the move to Los Angeles, the Rams’ value has increased over four-fold, with multiple playoff appearances and a Super Bowl win. In comparison, the Chargers, who also relocated to Los Angeles, have not seen the same level of success on the field or in terms of franchise value.
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